- Annual Recurring Revenue increased 27% year-over-year to $899 million
- Q2 revenue increased 29% year-over-year to $221 million
- Results exceeded guidance across every metric
SANTA CLARA, Calif., Sept. 02, 2026 (GLOBE NEWSWIRE) -- Netskope, Inc. (NASDAQ: NTSK) a leader in modern security and networking for the cloud and AI era, today announced financial results for the second quarter of fiscal year 2027 ended July 31, 2026.
“We are pleased with our strong second quarter performance, exceeding our guidance across every metric. Our results were driven by continued differentiating organic innovation, and durable customer demand for our Netskope One platform across security, networking, analytics and AI,” said Sanjay Beri, CEO of Netskope. “We are encouraged by early traction with our AI Security solutions, validating that Netskope sits right at the intersection of cloud, AI, networking and security and is becoming part of the essential, adaptive fabric for the modern enterprise to adopt AI safely. With our rapid product innovation, we are well positioned to go after our massive market opportunity.”
Second Quarter Fiscal 2027 Financial Highlights
- Annual Recurring Revenue (ARR): ARR grew 27% year-over-year to $899 million as of July 31, 2026.
- Revenue: Q2 revenue was $220.5 million, an increase of 29% year-over-year.
- Gross Profit and Margin: GAAP gross profit was $163.0 million, compared to $123.2 million for the second quarter of fiscal 2026, and GAAP gross margin was 74%, compared to 72% for the second quarter of fiscal 2026. Non-GAAP gross profit was $169.1 million, compared to $127.3 million for the second quarter of fiscal 2026, and non-GAAP gross margin was 77%, compared to 75% for the second quarter of fiscal 2026.
- Loss from Operations and Operating Margin: GAAP loss from operations was $(89.8) million, compared to a loss of $(46.0) million for the second quarter of fiscal 2026, and GAAP operating margin was (41)%, compared to (27)% for the second quarter of fiscal 2026. Non-GAAP loss from operations was $(19.3) million, compared to a loss of $(34.0) million for the second quarter of fiscal 2026, and non-GAAP operating margin was (9)%, compared to (20)% for the second quarter of fiscal 2026.
- Net Loss Per Share: GAAP net loss per share was $(0.27), compared to $(0.84) in the second quarter of fiscal 2026. Non-GAAP net loss per share was $(0.03), compared to $(0.32) in the second quarter of fiscal 2026.
- Cash Flow: Net cash used in operations was $(16.5) million, compared to $(16.9) million used in operations in the second quarter of fiscal 2026 and operating cash flow margin was (7)%, compared to (10)% in the second quarter of fiscal 2026. Free cash flow was $(29.8) million, compared to $(19.7) million in the second quarter of fiscal 2026 and free cash flow margin was (14)%, compared to (12)% in the second quarter of fiscal 2026.
- Cash, Cash Equivalents, and Marketable Securities: Total cash, cash equivalents, and marketable securities at the end of the second quarter of fiscal 2027 was $1.1 billion.
Recent Business Highlights
- Named a Leader in the Gartner® Magic Quadrant™ for Secure Access Service Edge (SASE) Platforms for the 3rd Year in a Row. Netskope was positioned highest in Ability to Execute in Gartner’s report. In the corresponding Critical Capabilities report, Netskope is the only vendor ranked as the highest scoring for three Use Cases, including: Foundational SASE Platform Use Case, Zero Trust SASE Platform Use Case, and the new Sovereign SASE Use Case.
- Named a Leader in the Gartner® Magic Quadrant™ for Security Service Edge for the 5th Year in a Row. Netskope has been named a Leader in every year this report has been published since its inception, consistently recognized both for its vision and its ability to execute.
- Netskope joined NVIDIA’s Open Secure AI Alliance, a coalition of industry leaders committed to building open, frontier AI tools that defenders can inspect, adapt, and trust.
- Continued to lead in innovation with new product releases, including:
- Netskope One DataSec Command Center, a unified control plane that discovers, understands, tracks, and protects sensitive data wherever it lives and moves across AI environments, cloud, the network, on-premises, endpoint, email, and more.
- Advancements to NewEdge AI Fast Path, which optimizes the network path between users, sites, and agents to AI destinations for faster inference results and minimizing time to first token (TTFT), accelerating complex multi-prompt agentic AI workflows, as well as optimizing LLM performance when accessing large volumes of data. AI Fast Path was shown to reduce latency by as much as 90% to popular AI destinations.
Financial Outlook
Netskope is providing the following guidance for the third quarter and full year fiscal 2027:
For the third quarter of fiscal 2027, we expect:
- Revenue of $227 million to $229 million
- Non-GAAP operating margin of approximately (8)%
- Non-GAAP net loss per share of $(0.03) to $(0.04), using approximately 415 million weighted average common stock outstanding
For the full year of fiscal 2027, we now expect:
- Total revenue of $888 million to $892 million
- Non-GAAP gross margin of approximately 77%
- Non-GAAP operating margin of approximately (9)%
- Non-GAAP net loss per share of $(0.15), using approximately 415 million weighted average common stock outstanding
- Free cash flow margin of approximately 2%
These statements are forward-looking, and actual results may differ materially. Refer to the Forward-Looking Statements safe harbor below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.
A reconciliation of non-GAAP guidance measures to corresponding GAAP measures is not available on a forward-looking basis without unreasonable effort due to the uncertainty regarding, and the potential variability of, reconciling items that may be incurred in the future, such as stock-based compensation and related employer payroll taxes, the effect of which may be significant.
Conference Call
Netskope will host a conference call at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time today to discuss its financial results and outlook. The conference call will be available via live webcast and replay at the Investor Relations section of Netskope’s website at investors.netskope.com.
Supplemental Financial and Other Information
Supplemental financial information can be accessed through Netskope’s investor relations website at investors.netskope.com.
Conference Participation Schedule
Netskope will participate and present at the following upcoming investor conferences. Details of the events are as follows:
- Piper Sandler 2026 Growth Frontiers Conference - Tuesday, September 15, 2026, 1:00 p.m. Pacific Time / 3:00 p.m. Central Time
- J.P. Morgan 2026 Software Forum - Friday, October 2, 2026, 10:00 a.m. Pacific Time
About Netskope
Netskope (NASDAQ: NTSK), a leader in modern security and networking for the cloud and AI era, addresses the needs of both security and networking teams by providing optimized access and real-time, context-based security for the AI ecosystem inclusive of agents, applications, tools, LLMs, people, devices, and data. Thousands of customers, including more than 30 of the Fortune 100, trust the Netskope One platform, its Zero Trust Engine, and its powerful NewEdge network to reduce risk and gain full visibility and control over cloud, AI, SaaS, web, and private applications – providing security and accelerating performance without trade-offs. Learn more at netskope.com, netskope.ai, on LinkedIn, and Instagram.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, statements regarding our future financial and operating performance, including our GAAP and non-GAAP guidance and financial outlook for the third quarter of fiscal 2027 and full year fiscal 2027, market opportunity and the demand for AI security products. There are a significant number of factors that could cause actual results to differ materially from statements made in this press release, including but not limited to: macroeconomic influences and instability, geopolitical events, operations and financial results and the economy in general; risks associated with scaling our business and managing our rapid growth; our ability to expand our partner relationships; our ability to identify and effectively implement the necessary changes to address execution challenges; our limited experience with new products and the risks associated with new product offerings, including adoption by customers and the discovery of software bugs; our ability to attract and retain new customers; the failure to timely develop and achieve market acceptance of new products as well as existing products; rapidly evolving technological developments in the market for security, networking, analytics and AI products and our ability to innovate and remain competitive; length of sales cycles; risks related to the use of AI in our platform; and general market, political, economic and business conditions, as well as those risks and uncertainties included in filings we make with the Securities and Exchange Commission from time to time.
All forward-looking statements in this press release are based on information available to Netskope as of the date hereof, and we undertake no obligation to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current financial quarter.
Non-GAAP Financial Measures
In addition to GAAP financial measures, this press release includes non-GAAP financial measures that we use to evaluate our business performance, identify trends affecting our business, formulate business plans and make strategic decisions. These non-GAAP financial measures include non-GAAP gross profit, non-GAAP gross margin, non-GAAP loss from operations, non-GAAP operating margin, non-GAAP net loss, non-GAAP net loss per share, free cash flow and free cash flow margin, and their respective definitions are presented below.
There are limitations to the non-GAAP financial measures included in this press release, and they may not be comparable to similarly titled measures of other companies. The non-GAAP financial measures included in this press release should not be considered in isolation from or as a substitute for their most directly comparable GAAP financial measures. Our management believes that our non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and income that may not be indicative of our ongoing core operating performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when analyzing historical performance and liquidity and when planning, forecasting and analyzing future periods.
For a reconciliation of the non-GAAP financial measures presented for historical periods to their most directly comparable GAAP financial measures, please see the tables captioned "Reconciliation of GAAP to Non-GAAP Financial Information" included at the end of this press release. We encourage you to review the reconciliation in conjunction with the presentation of the non-GAAP financial measures for each of the periods presented. In future periods, we may exclude similar items, may incur income and expenses similar to these excluded items and may include other expenses, costs and non-recurring items.
Non-GAAP Gross Profit and Non-GAAP Gross Margin
We define non-GAAP gross profit as GAAP gross profit excluding stock-based compensation expense and related taxes, and amortization of acquired intangible assets. We define non-GAAP gross margin as non-GAAP gross profit as a percentage of revenue.
Non-GAAP Loss from Operations and Non-GAAP Operating Margin
We define non-GAAP loss from operations as GAAP loss from operations excluding stock-based compensation expense and related taxes, amortization of acquired intangible assets, and restructuring costs. We define non-GAAP operating margin as non-GAAP loss from operations as a percentage of revenue.
Non-GAAP Net Loss
We define non-GAAP net loss as GAAP net loss adjusted to exclude stock-based compensation expense and related taxes, amortization of acquired intangible assets, restructuring costs, gain or loss on fair value changes in convertible notes, and non-GAAP provision for (benefit from) income taxes.
Non-GAAP Net Loss Per Share
We define non-GAAP net loss per share as GAAP net loss per share adjusted to exclude stock-based compensation expense and related taxes, amortization of acquired intangible assets, restructuring costs, gain or loss on fair value changes in convertible notes, and non-GAAP provision for (benefit from) income taxes.
Free Cash Flow and Free Cash Flow Margin
We define free cash flow as net cash provided by (used in) operating activities less purchase of property and equipment and capitalized internal-use software. Free cash flow margin is determined by dividing free cash flow by revenue. We believe free cash flow and free cash flow margin serve as valuable indicators of liquidity, as they provide our management, board of directors, and investors with insight into our ability to generate cash from our operations, strategic initiatives, and strengthening our balance sheet.
Annual Recurring Revenue
We define Annual Recurring Revenue (ARR) as the annualized value of our cloud subscription contracts that are active as of the measurement date, assuming any contract that expires during the next 12 months is renewed on its existing terms. Provided that we are actively negotiating a renewal or new agreement with a customer after the expiration of a contract, we continue to include that contract's annualized value in ARR until the customer notifies us of their decision not to renew. ARR excludes non-recurring components of revenue such as professional services, training, sales of hardware, and other non-recurring revenue.
Gartner Disclaimer
Gartner, Magic Quadrant for Security Service Edge, John Watts, Thomas Lintemuth, Theo de Feligonde, Jonathan Forest, 29 July 2026.
Gartner, Magic Quadrant for SASE Platforms, Jonathan Forest, Andrew Lerner, John Watts, 28 July 2026.
Gartner, Critical Capabilities for Security Service Edge, Thomas Lintemuth, Theo de Feligonde, John Watts, Jonathan Forest, 3 August 2026.
Gartner and Magic Quadrant are trademarks of Gartner, Inc. and/or its affiliates.
Gartner does not endorse any company, vendor, product or service depicted in its publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner publications consist of the opinions of Gartner’s business and technology insights organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this publication, including any warranties of merchantability or fitness for a particular purpose.
Investor Relations Contact:
Floris van der Veer
Director of Investor Relations, Netskope
[email protected]
Media Contact:
Tim Whitman
Director of Global Corporate Communications, Netskope
[email protected]
2026
Assets Current assets: Cash and cash equivalents$220,854 $432,583 Marketable securities 846,509 725,603 Accounts receivable, net 187,971 158,278 Inventories 4,841 4,902 Deferred contract acquisition costs 58,387 54,048 Prepaid expenses and other current assets 67,723 73,553 Total current assets 1,386,285 1,448,967 Property and equipment, net 96,814 93,876 Operating lease right-of-use assets 32,262 32,096 Intangible assets, net 18,563 21,403 Goodwill 61,083 61,083 Deferred contract acquisition costs, noncurrent 106,037 100,798 Other assets, noncurrent 11,170 14,069 Total assets$1,712,214 $1,772,292 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable$25,929 $14,436 Accrued compensation and benefits 76,646 99,880 Deferred revenue 546,462 532,732 Operating lease liabilities, current 10,229 10,769 Accrued expenses and other current liabilities 30,085 23,715 Total current liabilities 689,351 681,532 Deferred revenue, noncurrent 124,213 143,126 Convertible notes 698,116 720,960 Operating lease liabilities, noncurrent 23,887 23,424 Other liabilities, noncurrent 19,861 8,719 Total liabilities 1,555,428 1,577,761 Stockholders’ equity: Preferred stock - - Class A common stock 6 6 Class B common stock 35 34 Additional paid-in capital 3,021,543 2,888,202 Accumulated other comprehensive loss (8,585) (64,811)Accumulated deficit (2,856,213) (2,628,900)Total stockholders’ equity 156,786 194,531 Total liabilities and stockholders’ equity$1,712,214 $1,772,292
2025
2026
2025
Revenue$220,541 $170,758 $422,133 $328,494 Cost of revenue(1) 57,523 47,514 110,860 95,737 Gross profit 163,018 123,244 311,273 232,757 Operating expenses: Sales and marketing(1) 105,916 78,050 211,598 147,426 Research and development(1) 101,787 72,856 207,501 140,737 General and administrative(1) 45,114 18,303 90,710 35,917 Total operating expenses 252,817 169,209 509,809 324,080 Loss from operations (89,799) (45,965) (198,536) (91,323)Other income (expense), net: Loss on changes in fair value of convertible notes (26,528) (43,973) (38,753) (77,402)Other income, net 8,630 2,123 16,152 4,122 Loss before provision for income taxes (107,697) (87,815) (221,137) (164,603)Provision for income taxes 3,120 2,486 6,176 4,940 Net loss$(110,817) $(90,301) $(227,313) $(169,543)Net loss per share attributable to common stockholders, basic and diluted$(0.27) $(0.84) $(0.56) $(1.59)Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 405,045,835 108,096,178 402,802,925 106,429,655 (1)Includes stock-based compensation expense as follows: Cost of revenue$3,445 $421 $7,442 $927 Sales and marketing 10,846 3,086 25,210 6,459 Research and development 25,160 3,491 56,395 8,799 General and administrative 23,521 553 49,953 1,457 Total stock-based compensation expense$62,972 $7,551 $139,000 $17,642
2025
Cash flows from operating activities Net loss$(227,313) $(169,543)Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Stock-based compensation expense 139,000 17,642 Depreciation and amortization 20,647 25,497 Amortization of deferred contract acquisition costs 31,944 25,347 Non-cash operating lease expenses 7,499 6,532 (Accretion of discount) amortization of premium on investments (4,737) (454)Loss on change in fair value of convertible notes 38,753 77,402 Other (13) 210 Changes in operating assets and liabilities: Accounts receivable (29,693) 47,793 Inventories 60 113 Deferred contract acquisition costs (41,522) (34,320)Prepaid expenses and other current assets 587 (6,831)Other non-current assets 2,009 1,769 Accounts payable 10,110 4,535 Accrued compensation and benefits (23,338) (7,194)Operating lease liabilities (7,742) (5,917)Accrued expenses and other current liabilities 7,338 8,939 Deferred revenue (5,183) 16,070 Other non-current liabilities 11,142 1,124 Net cash (used in) provided by operating activities (70,452) 8,714 Cash flows from investing activities Purchases of property and equipment (15,162) (9,038)Capitalized internal-use software (1,349) (1,873)Purchases of intangible assets (2,300) - Purchases of marketable securities (689,633) (22,386)Proceeds from maturities of marketable securities 568,090 52,901 Net cash (used in) provided by investing activities (140,354) 19,604 Cash flows from financing activities Proceeds from issuance of common stock under employee stock purchase plan 12,272 - Proceeds from issuance of common stock upon exercise of stock options 15,299 21,257 Payments for taxes upon net share settlement of equity awards (28,403) - Payments for holdback consideration on business combination (981) (1,197)Payments for deferred offering costs - (3,579)Net cash (used in) provided by financing activities (1,813) 16,481 Net (decrease) increase in cash, cash equivalents, and restricted cash (212,619) 44,799 Cash, cash equivalents, and restricted cash, beginning of year 433,769 167,197 Cash, cash equivalents, and restricted cash, end of year$221,150 $211,996
2025
2026
2025
Gross profit reconciliation: Gross profit 163,018 123,244 311,273 232,757 Stock-based compensation expense and related taxes 3,581 421 7,648 941 Amortization of acquired intangible assets 2,534 3,593 4,843 9,675 Non-GAAP gross profit 169,133 127,258 323,764 243,373 Gross margin 74% 72% 74% 71%Non-GAAP gross margin 77% 75% 77% 74% Sales and marketing expense reconciliation: Sales and marketing expense 105,916 78,050 211,598 147,426 Stock-based compensation expense and related taxes (11,348) (3,378) (26,076) (6,781)Amortization of acquired intangible assets (151) (534) (297) (1,050)Restructuring costs (382) - (382) - Non-GAAP sales and marketing expense 94,035 74,138 184,843 139,595 Sales and marketing expense as a percentage of revenue 48% 46% 50% 45%Non-GAAP sales and marketing expense as a percentage of revenue 43% 43% 44% 42% Research and development expense reconciliation: Research and development expense 101,787 72,856 207,501 140,737 Stock-based compensation expense and related taxes (25,587) (3,517) (57,230) (8,862)Restructuring costs (2,334) - (2,334) - Non-GAAP research and development expense 73,866 69,339 147,937 131,875 Research and development expense as a percentage of revenue 46% 43% 49% 43%Non-GAAP research and development expense as a percentage of revenue 33% 41% 35% 40% General and administrative expense reconciliation: General and administrative expense 45,114 18,303 90,710 35,917 Stock-based compensation expense and related taxes (23,779) (553) (50,421) (1,458)Restructuring costs (784) - (784) - Non-GAAP general and administrative expense 20,551 17,750 39,505 34,459 General and administrative expense as a percentage of revenue 20% 11% 21% 11%Non-GAAP general and administrative expense as a percentage of revenue 9% 10% 9% 10% Loss from operations reconciliation: Loss from operations (89,799) (45,965) (198,536) (91,323)Stock-based compensation expense and related taxes 64,295 7,869 141,375 18,042 Amortization of acquired intangible assets 2,685 4,127 5,140 10,725 Restructuring costs 3,500 - 3,500 - Non-GAAP loss from operations (19,319) (33,969) (48,521) (62,556)Operating margin (41)% (27)% (47)% (28)%Non-GAAP operating margin (9)% (20)% (11)% (19)% Net loss reconciliation: Net loss (110,817) (90,301) (227,313) (169,543)Stock-based compensation expense and related taxes 64,295 7,869 141,375 18,042 Amortization of acquired intangible assets 2,685 4,127 5,140 10,725 Restructuring costs 3,500 - 3,500 - Loss on fair value changes in convertible notes 26,528 43,973 38,753 77,402 Provision for income taxes 150 - 447 - Non-GAAP net loss (13,659) (34,332) (38,098) (63,374) Basic and diluted EPS reconciliation: Net loss per share, basic and diluted$(0.27) $(0.84) $(0.56) $(1.59)Stock-based compensation expense and related taxes 0.16 0.07 0.35 0.17 Amortization of acquired intangible assets 0.01 0.04 0.01 0.10 Restructuring costs 0.01 - 0.01 - Loss on fair value changes in convertible notes 0.07 0.41 0.10 0.73 Provision for income taxes - - - - Non-GAAP net loss per share, basic and diluted$(0.03) $(0.32) $(0.09) $(0.60)Note: Certain figures may not sum due to rounding.
2025
2026
2025
Reconciliation of cash (used in) provided by operating activities to free cash flow Net cash (used in) provided by operating activities$(16,539) $(16,878) $(70,452) $8,714 Purchases of property and equipment (13,003) (1,628) (15,162) (9,038)Capitalized internal-use software (255) (1,147) (1,349) (1,873)Free cash flow$(29,797) $(19,653) $(86,963) $(2,197) Net cash provided by (used in) investing activities$36,825 $(1,911) $(140,354) $19,604 Net cash (used in) provided by financing activities$(5,282) $11,740 $(1,813) $16,481 Operating cash flow margin (7)% (10)% (17)% 3%Free cash flow margin (14)% (12)% (21)% (1)%Note: Certain figures may not sum due to rounding.